8 terms

Ansoff Matrix Summary

Short summary of ansoff matrix for a2 business students

Terms in this set (...)

Ansoff's matrix
is a well known model to use when making strategic decisions about marketing, and specifically over strategies for achieving growth.
Benefits of using Ansoff
Options can actually be compared in terms of the degree of risk involved. Also helps firm to consider alternative strategies and consider potential problems
Limitations of using Ansoff Matrix
Does not mean risk should be avoided. Other methods such as investment appraisal still need to be used alongside it to make full comparison.
Market Penetration
the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share. Long term risk of decline.
Market Development
the firm seeks growth by targeting its existing products to new market segments. Developing new products can be expensive so this can maximise sales.
Product Development
the firms develops new products targeted to its existing market segments. Trust and brand awareness already exists
the firm grows by diversifying into new businesses by developing new products for new markets. Carries the greatest risk
Evaluation of Ansoff Matrix
Risk is an important consideration in business decisions but there are also many other factors. Think of it as scale rather than 4 boxes. Market development might be harder than product development - it depends on the characteristics of the new markets.